[JohnHarper]

I’ve just joined the Tax Payers Alliance, it seems that they are becoming a force to be reckoned with and are good at generating publicity about public mis-spending.

We are taxed at every turn in this country, there are all the personal taxes listed by canucklad above but as a business there is even more of it, business rates which are just daylight robbery and even more so from next year when they are in part handed to local authorities directly who don’t even collect rubbish, VAT if you can’t claim it back which because of the nature of our business we can’t, employers NI which is huge, compulsory contributions to pensions and the list goes on.

Some days I think of closing down and emigrating particularly when I look at our bloated public sector and how so many of the workers complain about being expected to work. How many of them would survive a week in a job where work had to be done.

It’s all rather depressing really, perhaps not a topic for Friday afternoon.

[Binman62]

I just love seeping generalisations……

“bloated public sector.”

” so many of the workers complain about being expected to work. How many of them would survive a week in a job where work had to be done.”

When you a dribbling into your shirt or require one of them to wipe you ar… I wonder if the view will still be that they are over staffed and lazy.

When your house is on fire or you have had a heart attack in the street will you be happy to wait another 10 minutes?

Sorry, but there are millions of people up and down this country who work bloody hard for little pay or reward and who did not cause this economic catastrophe.

Bankers did and yet 5 years later they continue to award themselves obscene sums of money. I rather wish these greedy amoral individuals would immigrate and take the whole rotten industry with them.I would happily waive the APD to see them go.

[RedFlyer]

I’m glad to see you’ve avoided using any sweeping generalisations yourself Binman62….

[SimonS1]

At this stage of the game it is all about gesture politics. In other words 1p off a pint of beer, however pointless, will likely touch more voters.

Of course like most things 1p off a point will probably make no difference as wholesale prices will mysteriously increase by 1p a pint shortly afterwards. In other words tax revenues will become corporate profits.

I broadly agree with Bucksnet that further cuts in spending are required. In fact not cuts in critical spending but tackling wasteage.

Such as DfT incompetence on the West Coast franchise which will cost well over £50m of taxpayers money. Plus get the government and civil service travelling economy for a starter.

Then get going on the billions spent on benefits for 370,000 immigrants who are out of work (Jan 2012 figures). Bank £55m a year by stopping child benefits for kids not even living in the UK (the soft UK is one of only 4 of 22 EU countries to allow this).

Imagine, we can’t afford to pay our pensioners a liveable pension but hey ho let’s open the doors for 250,000 extra immigrants from Bulgaria and Romania (Migration watch figures).

[JohnHarper]

Binman, sorry you take offence but from where I sit and the people I deal with it is bloated and inefficient. We had a letter from the local authority earlier in the week. Three years ago we sent in documents in compliance with a planning condition. They banked the cheque the next day, this week we got a letter acknowledging our submission.

There is a further one we should submit but only can submit when the first part is approved, I’m not bothering and if they want it, they can chase us.

I’m not even sure we need more nurses or anything else like that. What we do need is less MBA managers (and I say that having one but I don’t write it after my name these days) and allow people to do their work without rafts of performance indicators and outcome measures. Get rid of them and reward the people who really do the work. That will reduce the size of our public sector nicely and get rid of some of the highest paid people overnight.

[canucklad]

My good mate is a banker……RBS as it happens, and apart from us jibing him that he is now on our payroll….

Quentin Crisp we now call him……

He reminds us that, the banking collapse wasn’t down to RBS’s domestic customer malpractice but was down to macho management within the investment (or not) part of the bank….

He also , rightly points out that as a country…….UK PLC ……we are lucky that Fred the Shred won and not the Barclays CEO, who at the time was seen as the loser in the ABN battle……..because if Barclays had won the consequences for the country would have been much worse!

So , it comes back to the City and this thirst for greedy immiedate returns…….

And back to the thread, why do I have to suffer when I travel (APD) because we have a group of people in the city who think they are in the Ballagio!!

[AnthonyDunn]

@ JohnHarper – 22/03/2013 14:33 GMT

And your experience of working in the public sector is….? A rhetorical question because it is transparently zero.

I noted after the 2013 budget statement that HM Treasury red book figures indicate that spending on local government will have been cut by about 50% in real terms between 2010-11 and 2015-16 and (outside of education, health and defence procurement) other government departments are facing cuts of something in the order of 1/3 by then.

You clearly either don’t get out much, don’t watch serious news programmes or read the serious press because you would otherwise have heard that public sector employment has already been slashed: I seem to recall the Tory side of the Coalition boasting of some 600,000 public sector job losses to date, with lots more to come on top of a total pay freeze lasting five years as well as considerable cuts in public sector pension entitlements. In the interests of balance, it should be added that of the growth in overall employment during the Bliar/Brooon years, well over 50% was public sector job growth so there was substantial scope for public sector job elimination and that is just what is happening. As encouraged by substantial cuts in Corporation Tax rates, the private sector is supposed to be responding with growth, increased exports and increased employment, might I enquire what you are doing to promote any of this…? Or is that a challenge too far?

Clearly, anything beyond public sector workers doing it for free and for the love of mankind is a penny too much for you. As Binman correctly observes, you wont be complaining then when there is no-one there either to treat your age-related illnesses (at no additional charge via the NHS) or to wipe your bottom for you when you are aged and infirm….

@ SimonS1 – 22/03/2013 15:13 GMT

Talking of gesture statements…. Can you provide a source for your statement about public sector business class travel?

Other than that it would be the equivalent to removing a pimple on a gnat’s posterior to cut any and all business class travel, if the travel rules are anything like how they were in the mid-90s when I left the Civil Service, it is only given to those travelling over six hours and above a particular (senior) grade who are, like you, expected to get to work upon arrival.

The DfT’s omnishambles re: the West Coast mainline owed itself to the department cutting all expenditures on outside consultants and doing it all in-house. This was to meet Francis Maude’s strictures about cost-reductions and particularly, the use of external consultants….

As for Migration Watch…. You really are clutching at straws now. The latest figures I have read of during this last week indicates that possibly 20,000 Bulgarians and Romanians MIGHT come to the UK – this is on the basis of polls conducted in both countries. But no-one really knows and everything is pure conjecture, speculation and, in the case of Migration Watch, scare-mongering for which there is always a very ready market in the UK.

[SimonS1]

http://www.dft.gov.uk/vosa/repository/09%20092a.pdf

See section 9.3. Business Class travel over 2.5 hours (not 6 – that would however be the norm in the private sector). First class on the Eurostar as well.

Plus some amusing waivers such as being able to use business class if “the facilities in economy class do not meet your needs because you are pregnant or very large or very tall”. Very large?? after a few business lunches??

Re the Romanians, what steps is the government taking then to ensure that none of the tens of thousands coming here do not join the other 370,000 immigrants on benefits funded by taxpayers?

On the West Coast, well, as we know, we all like a good excuse. I can’t remember how many reports have come out now basically all saying the same thing, processes not fit for purpose, ministers misled etc etc. Still it was a matter of time, and the dam could have broken in a number of areas – we are after still waiting for the contracts to be signed for the much needed Thameslink rail stock almost 2 years after a decision was made to give the work to Siemens. But then ministers don’t travel on the 06.30 from Brighton do they, in fact the Rail Minister travels to work by…er…car.

http://news.sky.com/story/1033980/rail-minister-opts-for-chauffeured-car-to-work

[TimFitzgeraldTC]

Hi AnthonyDunn

If there were all these cuts then how come absolute total government spending has increased every year. It is great that reductions have been made in some departments but it seems it isn’t getting through to lower government spending overall – or any reduction in the deficit. I find this personally quite alarming. If an individual behaved like this on a credit card it would have been stopped long ago, Credit would have been withdrawn and most likely demanded to be repaid ASAP.

[HarryMonk]

Tim

Its all about statistics, it depends on how someone wants to interpret the figures and whether they have a vested interest.
For example, using the following numbers purely as an example, lets say a government department’s budget was due to be increased by 5% but instead its now 4% some people would view this as a cut but it is still viewed as an increase to many

[TimFitzgeraldTC]

Hi Harry

You means lies, damned lies and statistics. Very true – you can just about prove anything these days with statistics / opinion polls (wording of questions) and so on. Sad really but heyho there we go. It is a Friday night and time to order a curry!

[SimonS1]

Yes Harry. Exactly the same way as new investment is often announced several times over. And those major projects always seem to be ones that start in 2 or 3 years time….like Cameron’s trip to Birmingham in July 2012 to announce railway spending in 2014.

Notice how this week’s budget included tax breaks for childcare…..from 2015?

Spin, spin, spin. No wonder no-one trusts a politician these days.

[AnthonyDunn]

AOTG/CXDiamond: Look away!

@ TimFitzgeraldTC – 22/03/2013 17:02 GMT

Phew, you asked the kind of questions I might have expected to get in a Finals Monetary Economics paper…

In reverse order, governments are not individuals and they do not operate on that basis either. There is one straightforward difference: whereas individuals are only able to borrow, governments (like banks…) can “create” money – and that’s what they do from time to time (or latterly, all of the time…). This ability might be considered a positive thing at times such as the 2008 financial sector meltdown when banks refused to lend to each other or anyone else. With credit lines and liquidity drying up, central banks intervened on behalf of governments to inject money into the financial system to prevent it from seizing up entirely. Neither you nor I can do that and were we to say to governments that they should not do so either, then we would have to be prepared to swallow the potential economic consequences: bank failures, inability to obtain credit, businesses going to the wall for want of cash to fund day-to-day operations and the resulting unemployment etc.

If you’re interested in just how badly wrong things went at the heart of our economy, read the BBC Economics Editor Stephanie Flanders on the truth about UK debt (where it’s come from):

http://www.bbc.co.uk/news/business-17398014

and her report on an International Monetary Fund research paper into the experience of governments which had substantially miscalculated their exposure to debt:

http://www.bbc.co.uk/news/business-20181393

The Gruaniad newspaper website has published a series of PDFs setting out by government department their control totals for each financial year 2008/09 to 2011/12 – the last year for which they were then available. This shows that between 2008/09 and 2011/12, general government expenditure rose from some £620.885Bn to £694.89Bn in CASH (nominal) terms. These figures come from the Treasury’s Red Book addendum to the Budget Statement. That is a 12% cash (nominal) increase but once inflation is stripped out, the real terms increase would be lower. When the Coalition government took office in 2010, the government’s ratio of revenue to expenditure was £4 in: £5 out so it had a gap of £1 funded through borrowing. To date, that gap has been narrowed to 66pence and it is scheduled to be eradicated by 2015/16.

There are several reasons why, despite the announcement of cuts, our level of debt is still increasing. Some are dealt with in the BBC Economics Editor’s postings above.

On the expenditures side, prior to the 2010 election, the then government piled billions of debt onto the government’s balance sheet as a result of having to bail out the banking sector. That did not come cheap and it cost us £tens of billions and much of it has not yet been repaid as the taxpayer is still “below the water” in our shareholdings in Royal Bank of Scotland and LloydsTSB/HBOS. HM Treasury flogged off the Northern Rock “Good Bank” to the bearded one for a song…

Why did the Government do all this? Because the financial sector is, effectively, the cardiovascular system of the economy, and what we witnessed in 2008 – with the collapse of Lehman Brothers and the bailouts inter alia of Northern Rock, RBS and HBOS – was the most serious cardiac arrest that this economy has experienced probably since the 1930s or even before then. That it was so severe is one of the principle reasons that things are so bad and so painfully slow to correct. You don’t just get up shortly after a heart attack and go out for a 10-mile run.

After the 2010 election, the spending review delivered real terms cuts across all government departments barring the Department of Work and Pensions and International Development; even Health and Education have suffered real terms cuts owing to the effects of inflation. It should be remembered that with an ageing population, expenditure on state pensions is increasing remorselessly as is the demand for medical and social care for the elderly. An increase in unemployment also increases the cost of JobSeekers Allowance (currently £71 per week for singles 25+).

Much of this is a timing issue. For local government, most of the cuts were “front loaded” i.e. they were to bite hard and immediately from financial year 2010/11 onwards and they are likely to amount to a 50% real terms cut by 2015/16. That is dramatic by any standards: a halving in five years. In other areas, such as the DWP’s many of the cuts are only due to take effect from this coming financial year. This is because of the time it has taken to devise and evaluate the root and branch welfare reforms soon to take effect including the overall benefits cap. You will note that many of these have been extremely contentious and driving through cuts to entitlements in a democracy is a lot easier said than done. Think about the furore around tuition fees…

But the burgeoning level of debt is two sided: as well as an expenditure side, there is also a revenue side. At the time of the 2008 financial crash, some 25% of UK government tax receipts came from the banking and financial services sector. With the crash, that flow of taxes evaporated and is now very substantially lower than before (sorry, I don’t have the current figure…). Unemployment, albeit that it has not risen anywhere near as high as would previously have been expected, has increased and this also means a nett loss in tax revenues from PAYE and NICs. Loss of consumer confidence translates into lower spending and thence lower VAT receipts. Are you aware that motorists are now driving fewer miles than at any time since the 1980s – meaning less duty and VAT from petrol and diesel. Non-financial sector Corporation Tax receipts are also down.

If it’s of any interest a good read is: “Too Big to Fail” by Andrew Ross Sorkin about Lehman’s collapse – a very well written “fly-on-the wall” account. Rather more heavy duty is “This Time Is Different: Eight Centuries of Financial Folly” by Carmen M. Reinhart and Kenneth Rogoff. The central thesis is that we’ve been here before and we will be back here again in the future because we choose to forget and because, owing to greed, arrogance and hubris we habitually kid ourselves that “this time, it’s different…” Except that it’s not.

[AnthonyDunn]

@ SimonS1 – 22/03/2013 16:35 GMT

I stand corrected on the Business Class rules – during my time in the MoD, I only ever went prole class or flew (one class, facing backwards) RAF.

What I do remember was the experience of having to come into work one Friday for an urgent operational issue when I had previously booked it as a leave day so that I could drive up to Scotland for a Saturday wedding. By the time it was sorted, the only way to get there in time was to fly up (expensively – no advance booking) and I was told “Thanks for coming in. As for your flight, that’s your problem…” It was small things like that that really endeared me to the relentless penny pinching of life in the public sector.

Did you by any chance also see §9.13.8? It reads: “Benefits accrued as a result of official travel (for instance Air Miles) must not be used for personal travel but you are encouraged to use them to offset the cost of future official journeys”.

Does that policy apply to you and across your company? Or, if not, do you declare your Avios/Miles and More points to HMRC as a benefit in kind? I would love to know.

Finally:

“Re: the Romanians, what steps is the government taking then to ensure that none of the tens of thousands coming here do not join the other 370,000 immigrants on benefits funded by taxpayers?”

Any chance of a source?

[SimonS1]

@AnthonyDunn

Re 370,000 immigrants on benefits – government data. See http://www.channel4.com/news/370-000-migrants-on-benefits

No I don’t declare Avios etc points as a benefit in kind, for the simple reason that they are not considered a benefit in kind by HMRC.

See http://www.hmrc.gov.uk/manuals/eimanual/eim21618.htm

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